Tokyo Stocks Open Lower After Fed Rate Hike

Tokyo stocks opened lower on Thursday, tracking losses on Wall Street after the US Federal Reserve unveiled another interest rate hike despite worries about the banking sector

Tokyo, (UrduPoint / Pakistan Point News - 23rd Mar, 2023 ):Tokyo stocks opened lower on Thursday, tracking losses on Wall Street after the US Federal Reserve unveiled another interest rate hike despite worries about the banking sector.

The benchmark Nikkei 225 index was down 0.75 percent, or 207.37 points, at 27,259.24 in early trade, while the broader Topix index fell 0.87 percent, or 17.05 points, to 1,945.88.

The dollar fetched 131.18 yen in early Asian trade, against 131.38 yen in New York.

The US central bank raised the benchmark lending rate by a quarter-point, underscoring its determination to tackle stubborn inflation.

"The Japanese market is seen starting with losses" weighed down by falls in the US market, Monex senior market analyst Toshiyuki Kanayama said in a note.

After tumbling into the red, Wall Street shares temporarily rebounded following the Fed's policy decision announcement, but "dipped again as Fed chair (Jerome) Powell showed his intention to keep monetary tightening," Kanayama said.

Policymakers are also trying to avoid further upheaval in the commercial banking sector, following the swift collapse of Silicon Valley Bank and fears of contagion.

With tensions in the sector blamed on steep hikes in borrowing costs over the past year, pressure has been building on central banks to halt tightening.

In a statement, the Fed said recent developments were likely to bring "tighter credit conditions for households and businesses." Adding to jitters were comments by US Treasury Secretary Janet Yellen, who told a Senate subcommittee Wednesday that the United States was not considering a broad increase in deposit insurance.

In Tokyo, Sony Group was down 1.88 percent at 11,510 yen, Toyota was off 0.75 percent at 1,787.5 yen, and Hitachi was down 1.54 percent at 6,766 yen.

Banks were lower, with Mitsubishi UFJ Financial Group trading down 2.23 percent at 831.8 yen, Sumitomo Mitsui Financial Group down 1.65 percent at 5,188 yen, and Mizuho Financial Group off 1.77 percent at 1,834 yen.